WASHINGTON STATE REGISTER

WSR 01-23-088

PROPOSED RULES

BOARD OF ACCOUNTANCY

[ Filed November 21, 2001, 11:15 a.m. ]

Supplemental Notice to WSR 01-15-087.

Preproposal statement of inquiry was filed as WSR 01-11-076.

WAC 4-25-410 Definitions.

WAC 4-25-520 What public records does the board maintain?

WAC 4-25-540 What are brief adjudicative proceedings?

WAC 4-25-610 Principles of conduct.

WAC 4-25-620 When must I comply with the rules of conduct requiring integrity and objectivity?

WAC 4-25-626 What restrictions govern commissions, referral, and contingent fees?

WAC 4-25-630 Competence.

WAC 4-25-631 With which rules, regulations and professional standards must a CPA comply?

WAC 4-25-640 Clients' confidential information.

WAC 4-25-660 What are the limitations on advertising and other forms of solicitation?

WAC 4-25-710 CPA certificate -- Education requirements.

WAC 4-25-720 CPA examination--Application.

WAC 4-25-721 What does the board consider to be cheating on the CPA examination, what actions may the board take if cheating is suspected, and what sanctions may the board impose if cheating occurs?

WAC 4-25-730 What are the experience requirements in order to obtain a CPA license?

WAC 4-25-735 New What rules must a certificateholder comply with and how does a certificateholder apply for licensure?

WAC 4-25-745 How do I apply for an initial CPA license and/or certificate?

WAC 4-25-746 How do I apply for a Washington state CPA license and/or certificate if I hold a valid CPA certificate, license or permit in another state?

WAC 4-25-750 What are the CPA firm licensing requirements?

WAC 4-25-752 New How do I register as a resident nonlicensee owner of a licensed firm and with which rules must a nonlicensee firm owner comply?

WAC 4-25-756 New I am licensed in another state -- How do I notify the board of my intent to enter the state in order to obtain practice privileges in the state of Washington?

WAC 4-25-783 How do I renew a Washington CPA certificate and/or license granted through foreign reciprocity?

WAC 4-25-790 How do I renew my CPA license and/or certificate?

WAC 4-25-791 If I hold a certificate under the reasonable cause exemption to the CPE requirements, how do I apply to return to my previous status as a licensee or a certificateholder?

WAC 4-25-792 How do I apply for reinstatement of a lapsed CPA license and/or certificate?

WAC 4-25-793 New If I am a retiree, how do I apply to return to my previous status as a licensee or a certificateholder?

WAC 4-25-795 How do I apply for reinstatement of a revoked or suspended license and/or certificate?

WAC 4-25-820 Quality assurance review.

WAC 4-25-830 What are the CPE requirements?

WAC 4-25-910 What are the bases for the board to impose discipline?

Purpose: The board conducted public rule-making hearings during August and September of 2001. After considering testimony received the board made revisions to its proposed rules and makes this supplemental notice to amend or adopt rules to implement the revisions to chapter 18.04 RCW passed through the 2001 legislative session (E2SSB 5593).

Statutory Authority for Adoption:
Statutory authority for adoption: Statute being implemented:

WAC 4-25-410 RCW 18.04.055 RCW 18.04.055(16)

WAC 4-25-520 RCW 18.04.055 and 42.17.260 RCW 42.17.260

WAC 4-25-540 RCW 18.04.055(1), 34.05.220, and 34.05.482 RCW 18.04.055(1) and 34.05.482

WAC 4-25-610, 4-25-620, 4-25-626, 4-25-630, 4-25-631, 4-25-640, and 4-25-660 RCW 18.04.055(2) RCW 18.04.055(2)

WAC 4-25-710 RCW 18.04.055(5) and 18.04.105(1) RCW 18.04.055(5) and 18.04.105(1)

WAC 4-25-720 RCW 18.04.055(5) and 18.04.105(2) RCW 18.04.055(5) and 18.04.105(2)

WAC 4-25-721 RCW 18.04.055 RCW 18.04.055

WAC 4-25-730 RCW 18.04.055(11) and 18.04.105 (1)(d) RCW 18.04.055(11) and 18.04.105 (1)(d)

WAC 4-25-735 RCW 18.04.055(12) and 18.04.105(4) RCW 18.04.055(12) and 18.04.105(4)

WAC 4-25-745 RCW 18.04.055, 18.04.105(1), and 18.04.215(1) RCW 18.04.055, 18.04.105(1), and 18.04.215(1)

WAC 4-25-746 RCW 18.04.180 and 18.04.215(6) RCW 18.04.180 and 18.04.215(6)

WAC 4-25-750 RCW 18.04.055(8), 18.04.195, and 18.04.205 RCW 18.04.055(8), 18.04.195, and 18.04.205

WAC 4-25-752 RCW 18.04.055(13) and 18.04.195(8) RCW 18.04.055(13) and 18.04.195(8)

WAC 4-25-756 RCW 18.04.350(2) RCW 18.04.350(2)

WAC 4-25-783 RCW 18.04.183 and 18.04.215(2) RCW 18.04.183 and 18.04.215(2)

WAC 4-25-790, 4-25-791, and 4-25-792 RCW 18.04.215 (2) and (4) RCW 18.04.215 (2) and (4)

WAC 4-25-793 RCW 18.04.215(7) RCW 18.04.215(7)

WAC 4-25-795 RCW 18.04.215(2), 18.04.335, and 34.05.220 RCW 18.04.215(2), 18.04.335, and 34.05.220

WAC 4-25-820 RCW 18.04.055(9) RCW 18.04.055(9)

WAC 4-25-830 RCW 18.04.055(7), 18.04.215(5) RCW 18.04.055(7), 18.04.215(5)

WAC 4-25-910 RCW 18.04.055(11), 18.04.295, and 18.04.305 RCW 18.04.055(11), 18.04.295, and 18.04.305

Statute Being Implemented: See Statutory Authority for Adoption above.

Summary: The amendments and new rules include public protection provisions, qualifications to be a licensee, regulation of certified public accountants (CPAs); ownership of CPA firms; assurance that CPAs from Washington state are substantially equivalent with CPAs in other states; assurance that CPAs from other states have met qualifications that are substantially equivalent to the CPA qualifications of this state; and regulation of the activities of persons holding licenses, certificates (including a new inactive certificateholder status), and non-CPA owners of CPA firms.

Reasons Supporting Proposal: E2SSB 5593 that passed through the 2001 legislative session significantly revised the Public Accountancy Act, chapter 18.04 RCW. The Board of Accountancy needs to revise all of its rules for statutory authority and amend or adopt rules to implement the revisions to chapter 18.04 RCW.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Dana M. McInturff, CPA, 711 South Capitol Way, #400, Olympia, (360) 586-0163.

Name of Proponent: Board of Accountancy, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The board's goal with all of its rule proposals is to:

Promote clarity.

Ensure effective communication.

Ensure fairness in interpretation and application of the rules.

Promote efficiencies through minimizing gray areas.

Specifically:

WAC 4-25-410 Defines terms used throughout the board's rules to provide clarity for users.

WAC 4-25-520 Notifies the public of the records available for inspection and copying for informational purposes.

WAC 4-25-540 Chapter 34.05 RCW, Administrative Procedure Act, allows agencies to adopt brief adjudicative proceedings to resolve some limited administrative issues. The board uses brief adjudicative proceedings to provide a clear process to persons to appeal staff actions denying applications.

WAC 4-25-610, 4-25-620, 4-25-630, 4-25-631 Advises Washington CPAs of the standards of conduct and when they must comply with these standards. These standards are needed to establish and maintain high standards of competence and ethics to address the need to protect the public.

WAC 4-25-626 In order to protect the public interest, this rule prohibits licensees from being compensated in a manner which tends to bias or give the appearance of tending to bias the results of their attest services. However, to permit Washington CPAs to practice public accounting on a level playing field with other CPAs nationwide, this rule is aligned with the Uniform Accountancy Act (UAA), to follow the national trend of allowing compensation in the form of commissions, referral fees, and contingent fees, and to address the profession's desire to allow commissions and contingent fees with disclosure. In order to ensure the public is sufficiently informed the rule requires all CPAs accepting commissions, referral fees, and contingent fees to disclose in writing and in advance of client acceptance the method of calculating the fee and the CPA's role as the client's advisor.

WAC 4-25-640 Incorporates parts of statute (RCW 18.04.390 and [18.04.]405) into the board's rules of professional conduct. The rule prohibits Washington CPAs from disclosing any confidential client information without the consent of the client; clarifies when the rule does not affect a CPA's disclosure of client information, and outlines a CPA's obligations with respect to the records of a client in a clear format. This standard of professional conduct is needed to protect the public by ensuring privacy and record accessibility.

WAC 4-25-660 "Advertising and other forms of solicitation" is a rule of professional conduct necessary to establish and maintain high standards of competence and ethics of certified public accountants (CPAs) to protect the public interest especially in the area of advertising and solicitation.

WAC 4-25-710 Outlines the educational requirements for individuals to qualify to apply for the CPA examination and ultimately the CPA license, including requirements regarding education obtained outside of the United States, accreditation standards, and an alternative to accreditation. Candidates for the CPA exam need clear concise requirements to ensure fair treatment of all candidates. Ensures candidates will have the necessary foundation and obtain acceptable competence in an increasingly complex business environment to eventually become a licensed CPA. This rule continues to be aligned with the Uniform Accountancy Act (UAA) therefore assuring that Washington CPAs are substantially equivalent with CPAs in other states.

WAC 4-25-720 Outlines the requirements for individuals making application for the CPA exam such as how to file an application, the application due date, timing for completion and documentation of the education requirements, when exam admission notices will be mailed, the passing grade, conditional credit, proctoring, and the completion of an ethics exam.

WAC 4-25-721 This rule provides CPA exam candidates with a listing of what the board considers to be cheating, what actions the board may take if cheating is suspected, and what sanctions the board may impose if cheating occurs.

WAC 4-25-730 Licensed CPAs are statutorily given the exclusive right to perform audit, review, and compilation services. In exchange for this valuable right, CPAs are expected to have a certain level of mature expertise prior to offering unsupervised services to the general public. Washington state statute mandates that CPAs demonstrate one year of public accounting experience and meeting competency requirements. The profession and the public expect CPAs to have a focused, relevant and meaningful apprenticeship period to perfect skills and abilities.

WAC 4-25-735 Establishes the requirements for certificateholders to qualify and apply for a license.

WAC 4-25-745 Sets forth the procedures applicants for an initial license must follow in a short clear manner; notifies the applicant of the board's definition of a "complete" application and where the board will send notification when the application is complete; sets the expiration of the license on June 30 of the third calendar year following initial licensure; notifies applicants of the prohibition against using the CPA title by persons not properly licensed.

WAC 4-25-746 Sets the procedures applicants for a Washington CPA license by reciprocity must follow in a short clear manner; notifies the applicant of the board's definition of a "complete" application and where the board will send notification when the application is complete; sets the expiration of the license certificate on June 30 of the third calendar year following licensure in Washington state; restates RCW 18.04.215(6) that allows CPAs licensed in another state to practice in Washington state from the date of filing a "complete" application with the board.

WAC 4-25-750 RCW 18.04.205(3) directs the board to prescribe the procedures to be followed to register and maintain offices established for the practice of public accounting in Washington state. RCW 18.04.195 requires CPA firms to obtain, and renew, licenses to practice public accounting.

WAC 4-25-752
New
Establishes the requirements for resident nonlicensee owner applying to be a registered nonlicensee owner and defines with which rules the nonlicensee owner must comply.

WAC 4-25-756 New Establishes the requirements for individuals, whose principal place of business is not in Washington, to submit notification for the privilege to practice in Washington state.

WAC 4-25-783 Sets the procedures for the renewal of a CPA license granted based in part on a foreign accounting credential in a short clear manner eliminating confusion; notifies the applicant that the board will send a renewal application in January to the last address the CPA provided to the board; notifies the applicant of the board's definition of a "complete" renewal application form and the due date for filing; sets the expiration of the certificate/license to June 30 of the third calendar year following the renewal; notifies the applicant that failure to file a complete application by the due date will result in late fees; notifies the applicant that failure to file a complete application prior to the expiration of their certificate/license will result in the lapse of their certificate/license and loss of the right to use the CPA title or be an owner of a CPA firm.

WAC 4-25-790 Sets the procedures for the renewal of a certificate/license/resident nonlicensee firm owner registration in a short clear manner eliminating confusion; notifies the applicant that the board will send a renewal application in January to the last address the CPA provided to the board; notifies the applicant of the board's definition of a "complete" application and the due date for filing; sets the expiration of the certificate/license/resident nonlicensee firm owner registration to June 30 of the third calendar year following the renewal; notifies the applicant that failure to file a complete application by the due date will result in late fees; notifies the applicant that failure to file a complete application prior to the expiration of their certificate/license/resident nonlicensee firm owner registration will result in the lapse of their certificate/license and loss of the right to use the CPA title or be an owner of a CPA firm.

WAC 4-25-791 Sets the procedures certificateholders who held a license prior to July 1, 2001, must follow to return to a previous status as a licensee.

WAC 4-25-792 In a short, clear manner that eliminates confusion, this rule sets the procedures CPAs must follow to reinstate their lapsed license, certificate, or registration as a resident nonlicensee firm owner.

WAC 4-25-793 New Establishes the process for a retiree to "reactivate" their certificate or license.

WAC 4-25-795 Sets the procedures persons or firms whose certificate/license/resident nonlicensee firm owner registration has been revoked or suspended must follow in order to request modification of a suspension or revocation order or to apply for reinstatement.

WAC 4-25-820 In order to protect the public from financial information that does not meet set standards, this rule establishes the process of monitoring the attest work of licensees (including CPA firms). CPA firms offering attest (audit, review, or compilation) services must comply with set standards. Every three years the CPA firm must either submit reports to financial statements for board review or demonstrate participation in a board approved peer review program. Set the actions the board may take if it is determined that a report is substandard or seriously questionable with respect to applicable professional standards.

WAC 4-25-830 RCW 18.04.215(5) authorizes the board to set the rules for continuing professional education to maintain or improve the professional competency of licensees, certificateholders, and resident nonlicensee firm owners as a condition to maintaining their certificate/license/resident nonlicensee firm owner registration; accomplishes a heightened awareness of the board's rules, especially as they pertain to ethics, through required continuing professional education.

WAC 4-25-910 RCW 18.04.295 and 18.04.305 authorize the board to impose discipline against Washington CPAs, CPA firms, individuals granted practice privileges, or resident nonlicensee firm owners. Using the clear rule-writing technique that eliminates confusion, this rule lists specific examples of prohibited acts that constitute grounds for discipline.

Proposal Changes the Following Existing Rules:

WAC 4-25-410 Adds the definition of "active individual participant."

Adds the definition of "affiliated entity." Having the definition align with (anticipated) national standards will support an understanding of, and compliance with, the board's rule.

Removes ambiguous language from the definition of "attest" services.

Adds individuals granted practice privileges to the listing of individuals permitted to perform attest services.

Aligns the definition of "certificate" to the new statute.

Adds the definition of "certificateholder" from the new statute.

Adds relationships with firm owners, affiliated entities, and owners of affiliated entities to circumstances creating a "client."

Adds the CPA's firm, CPA firms and firm owners to the criteria defining a "commission."

Includes persons with practice privileges in the definition of "CPA" and reworded the definition to clarify that under the new act licensees no longer hold a certificate (they hold just a license).

Adds persons with practice privileges to the definition of "CPA."

Adds the definition for "entering the state."

Adds the notion that CPA firms and firm owners (in addition to CPAs) perform professional services for "enterprises."

Aligns the definition of "firm" with the act.

Establishes the meaning of "firm owner" because that term is used in the rules.

Adds persons with practice privileges to the definition of whom may practice public accounting under the definition of "holding out."

Adds the definition of "inactive" from the new statute.

Adds the definition of "license" (note the definition refers to both an individual and a firm license).

Aligns the definition of "licensee" with the act.

Adds the definition of "manager" because the term is used in the rules.

Adds the abbreviation for National Association of State Boards of Accountancy.

Adds the definition of "natural person" because the term is used in the rules (referring to nonlicensee firm owners).

Adds the definition of "nonlicensee owner" because the term is used in the rules.

Moves the definition of "quality review" to "peer review" to reflect verbiage changes resulting from the new statute.

Adds the definition of "practice privileges because the term is used throughout the rules.

Adds the definition of "principal place of business" because the term is used in the rules.

Aligns the definition of "reports on financial statements" with statute.

Adds the definition of "representing oneself" because the term is used in the rules.

Adds the definition of "state" because the term is used in the rules.

Adds the definition of "statements on auditing standards (SAS)."

WAC 4-25-520 Due to provisions in the new act, the board will maintain public records on individuals with practice privileges and registered resident nonlicensee firm owners.

WAC 4-25-540 Adds the provision that the board's procedures are governed by the uniform procedural rules codified in chapter 10-08 WAC. (Based on the Prosecuting Attorney General's recommendation.)
Adds the new types of applications (resulting from the new act) that will come under the BAP provisions.
Separates the language for certificate renewals, and reinstatements from the language for license applications, renewals, and reinstatements. (Under the old law licensees held both a certificate and a license; under the new law licensees will only hold a license.)

WAC 4-25-610 Requires firm owners to comply with the principles of conduct. Note: Licensees, certificateholders and individuals granted practice privileges are included in the definition of CPA.

Clarifies that CPA firms must comply with the principles.

To clarify the current requirements, changes the words "shall" to "must."

WAC 4-25-620 Requires firm owners to comply with requirements concerning integrity and objectivity. Note: Licensees, certificate-holders and individuals granted practice privileges are included in the definition of CPA.

Clarifies that CPA firms must comply with the rule.

To clarify the current requirements, changes the words "shall" to "must."

Clarifies that if the language of professional standards listed in board rule differ or conflict with specific board rules, board rules prevail.

WAC 4-25-626 Adds firm owners, affiliated entities, and owners of affiliated entities to the example of relationships that result in a prohibition against accepting a commission/referral/contingent fee.

Removes the definition of contingent fee because it was added to WAC 4-25-410 Definitions.

To clarify the current requirements, changes the words "shall" to "must."

Adds the requirement to obtain the client's consent to the fee arrangement in writing.

Adds that nothing in the rule precludes the purchase, sale, or merger of a CPA practice or requires disclosure to clients of terms or payments made or received pursuant to the purchase, sale, or merger.

WAC 4-25-630 Adds firm owners to the requirement to be competent.

Clarifies that CPA firms must meet the competency requirement.

To clarify the current requirements, changes the words "shall" to "must."

WAC 4-25-631 Adds firm owners to the requirement to comply with standards.

Clarifies that CPA firms must comply with standards.

Note: The term "CPA" includes licensees, certificateholders, and individuals granted practice privileges.

Removes the language "including subsequent amendments" language which makes the rule too vague and could make the rule difficult to enforce.

Clarifies the current requirement that CPA firms and CPAs must comply with rules and regulations promulgated by the SEC.

Clarifies that if the language of professional standards listed in board rule differ or conflict with specific board rules, board rules prevail.

Replaces the vague language: "Auditing and accounting guides (both general and industry) issued by the AICPA" with the specific language "AICPA Industry Audit and Accounting Guides."

WAC 4-25-640 Moves the definition of client to the first paragraph and made it applicable to the entire rule.

Adds firm owners to those required to comply with the rule.

Changes all references to "CPA" to "licensee" making this rule applicable to licensed CPAs, CPA firms and individuals with practice privileges. Excludes certificateholders from the provisions of this rule by using the term "licensee."

To clarify the current requirements, changes the words "shall" to "must."

Clarifies that this rue does not preclude a review of client information in conjunction with a prospective purchase, sale, or merger of all or part of a CPA's practice.

Clarifies that client records include electronic documents.

WAC 4-25-660 Adds firm owners to those that must comply with the rule.

Corrects language by tying the notification requirement to a "web site" rather than "Internet site."

Clarifies that licensees (including CPA firms) must place notification of holding a Washington state license on their web site or provide a name and contact information for an individual in the organization who will respond to inquiries regarding individual license information within seven business days.

Adds the requirement that certificateholders using the CPA title must state on their web site that they do not hold a license to practice public accounting and they cannot offer accounting, attest, tax services, etc. in association with the use of title CPA, or CPA-inactive.

Adds the requirement that firm owners must disclose on their web site that they are either licensed or registered (nonlicensee owners) with the board.

To clarify the current requirements, changes the words "shall" to "must."

WAC 4-25-710 Eliminates the pre-July 1, 2000, education requirement.

Moves the definition of "accounting concentration" to the "education requirements" sections.

Adds the "completion of education requirement" section from WAC 4-25-720 to this rule.

Clarifies the current requirement for candidates to complete a form in order to utilize the 120 day provision.

WAC 4-25-720 Eliminates the statement that the board will refund a portion of examination fees because refunds are made by the contractor.

Incorporates the exam conditioning requirements into the rule. (The conditioning requirements were eliminated from statute. Note, this revision does not change the conditioning requirements it simply places the existing requirements into the rule).

Clarifies the current ethics examination requirements.

Removes the "completion of education requirement" section from this rule and adds it to WAC 4-25-710.

WAC 4-25-721 Adds that cheating on the CPA exam demonstrates a lack of good character. This ties directly to the requirements for licensure in the statute.

Removes vague language that all candidates involved in cheating may be subject to penalties, although not necessarily of the same severity.

Removes fines and cost recovery from the list of sanctions the board may impose on exam candidates.

WAC 4-25-730 Promotes fairness in the application of a rule by requiring the same competency attainment by applicants no matter where the experience is obtained - whether in a CPA firm, government, private industry, or academia.

Adds verbiage from the statute regarding the specific types of skills that must be used in order to meet the experience requirement.

Removes references to continuing professional education requirements - these requirements are addressed in other board rules.

Adds the provision in the new statute allowing individuals holding a certificate at June 30, 2001, and applying for licensure before June 30, 2004, to use any prior experience.

WAC 4-25-735 New section.

WAC 4-25-745 Consistent with changes in statute, eliminates the ability to apply for a certificate.

Adds a continuing professional education requirement for those individuals who passed the CP examination more than four years prior to applying for an initial CPA license.

Lists in the rule the requirements for licensure.

Adjusts the definition of what services must be performed in a CPA firm to align with the new statute.

Eliminates the requirement to have a notarized signature.

WAC 4-25-746 Adds the requirement (from statute) that the other state of licensure must grant reciprocity provisions to Washington's CPAs.

Clarifies the requirements for licensure as stated in statute including notice that the board may accept the National Association of State Boards of Accountancy's designation of the applicant as substantially equivalent to national standards as meeting the requirements for licensure.

Adds the notation that a CPA may practice as soon as the license application is filed with the board.

Adds the notation (from statute) that individuals obtaining a Washington license via interstate reciprocity must notify the board within thirty days if the license issued by the other jurisdictions has lapsed or become invalid.

Eliminates the requirement to have a notarized signature.

WAC 4-25-750 Adds the provision (from statute) allowing for nonlicensee owners.

Adds the requirement (from statute) that the principal partner of a partnership, principal officer of a corporation, or the principal manager of a limited liability company or any partner, officer, or member having authority over issuing reports on financial statements must be a licensee.

Adds the requirements (from statute) for a nonlicensee owner to be a natural person, meet good character requirements, comply with board rules, and be an active participant in the firm or affiliated entity.

Adds the requirement (from statute) for a resident nonlicensee owner to register with the board.

Clarifies what is considered an amendment.

WAC 4-25-752 New section.

WAC 4-25-756 New section.

WAC 4-25-783 Identifies that a renewal form will be mailed to the CPA.

Clarifies that in order to renew the individual must certify that s/he compiled with the board's CPE requirements.

Adds the requirement (from statute) that beginning with the first day of the first renewal period beginning after July 1, 2001, certificateholders must print or display the word "Inactive" immediately following the CPA title whenever the CPA title is printed.

WAC 4-25-790 Adds renewing resident nonlicensee owner registrations to the "how do I renew" rule.

Clarifies that a licensee may not renew as a certificateholder.

Clarifies that in order to renew the individual must certify that they met the board's CPE requirements.

WAC 4-25-791 Tailors this rule so that it applies to certificateholders who want to return to their previous status as a licensee.

Adds the requirement that certificateholders cannot practice public accounting in association with the use of the title CPA until the individual returns to his/her previous status as a licensee.

WAC 4-25-792 Extends the reinstatement rule to include resident nonlicensee owner registrations.

Clarifies that individuals with a lapsed individual license may not reinstate as certificateholders.

WAC 4-25-793 New section.

WAC 4-25-795 Extends the reinstatement of a revoked or suspended license or certificate to resident nonlicensee owner registrations.

WAC 4-25-820 Adds that a firm required to submit to peer review may be assessed the cost of the peer review.

Adds that firms requesting exemption from QAR must submit to the board letter of comments, response to letter of comments, if applicable, and letter of acceptance in addition to the copy of an unmodified report.

WAC 4-25-830 Changes the CPE requirement for certificateholders to a four hour course in ethics applicable to the practice of public accounting in the state of Washington every three years.

Adds the CPE requirement for resident nonlicensee firm owners to obtain a four hour course in ethics every three years.

Adds that individuals holding practice privileges are exempt from the CPE requirements.

Adds prorated CPE requirements for individuals converting their status from certificateholder to a licensee when the license is issued less than three years before the end of a certificate renewal cycle.

Changes the title "reasonable cause exemption" to "renewal following retirement" consistent with changes in statute.

Consistent with the new statute, requires certificateholders applying for a license to obtain one hundred twenty hours of CPE including a four hour course in ethics and limited to twenty-four hours in nontechnical subjects; includes a prorated schedule for certificateholders whose certificate was issued less than three years prior to the date of application for a license.

Adds resident nonlicensee firm owners to the provisions allowing for a CPE extension request.

WAC 4-25-910 Adds the new provisions (from the new statute) pertaining to individuals granted practice privileges, nonlicensee firm owners, full restitution, and fines (up to $10,000).

Adds failure to comply with an order of the board as a prohibited act.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rules will not have more than minor economic impact on business.

RCW 34.05.328 does not apply to this rule adoption. The Board of Accountancy is not one of the agencies required to submit to the requirements of RCW 34.05.328.

Hearing Location: Wyndham Garden Hotel - SeaTac, 18118 Pacific Highway South, SeaTac, WA, on January 25, 2002, at 9:00 a.m.

Assistance for Persons with Disabilities: Contact Cheryl Sexton by January 18, 2002, TDD (800) 833-6384, or (360) 664-9194.

Submit Written Comments to: Dana M. McInturff, CPA, Executive Director, Washington State Board of Accountancy, P.O. Box 9131, Olympia, WA 98507-9131, fax (360) 664-9190, by January 21, 2002.

Date of Intended Adoption: January 25, 2002.

November 20, 2001

Dana M. McInturff, CPA

Executive Director

OTS-4964.4

AMENDATORY SECTION(Amending WSR 01-11-124, filed 5/22/01, effective 6/30/01)

WAC 4-25-410 Definitions. For purposes of these rules the following terms have the meanings indicated unless a different meaning is otherwise clearly provided in these rules:

(1) "Act" means the Public Accountancy Act codified as chapter 18.04 RCW.

(2) "Active individual participant" means a natural person whose primary occupation is at the firm or affiliated entity's business. An individual whose primary source of income from the business entity is provided as a result of passive investment is not an active individual participant.

(3) "Affiliated entity" means any entity, entities or persons that directly or indirectly through one or more relationships influences or controls, is influenced or controlled by, or is under common influence or control with other entities or persons. This definition includes, but is not limited to, parents, subsidiaries, investors or investees, coinvestors, dual employment or management in joint ventures or brother-sister entities.

(4) "Attest services" are services performed by a licensee in accordance with:

(a) Statements on Auditing Standards and related Auditing Interpretations issued by the American Institute of Certified Public Accountants (AICPA) ((~~including subsequent amendments~~));

(b) Statements on Standards for Accounting and Review Services and related Accounting and Review Services Interpretations issued by the AICPA ((~~including subsequent amendments~~)); and

(c) Statements on Standards for Attestation Engagements and related Attestation Engagements Interpretations issued by the AICPA ((~~including subsequent amendments~~)).

((~~(3)~~)) (5) "Audit," "review," and "compilation" are terms reserved for use by licensees and individuals granted practice privileges under the Act.

((~~(4)~~)) (6) "Board" means the board of accountancy created by RCW 18.04.035.

((~~(5)~~)) (7) "Certificate" means a certificate as a ((~~certified public accountant~~)) CPA issued ((~~under the act, or a corresponding certificate issued by another state or foreign jurisdiction that is recognized in accordance with the reciprocity provisions of the act~~)) in the state of Washington prior to July 1, 2001, as authorized by the Act, unless otherwise defined in rule.

((~~(6)~~)) (8) "Certificateholder" means the holder of a certificate as a certified public accountant who has not become a licensee, has maintained CPE requirements, and who does not practice public accounting.

(9) "Client" means the person or entity that retains a ((~~certified public accountant (CPA), or the~~)) CPA(('s)) firm ((~~or organization~~)), a CPA, the CPA's firm, or a firm owner, an affiliated entity, or the owner of an affiliated entity through other than an employer/employee relationship.

((~~(7)~~)) (10) "Commissions and referral fees" are compensation arrangements where:

(a) The primary contractual relationship for the product or service is not between the client and the CPA firm, the CPA, the CPA's firm, or a firm owner;

(b) The CPA firm, the CPA, the CPA's firm, or a firm owner is not primarily responsible to the client for the performance or reliability of the product or service;

(d) A third party instead of the client pays the CPA firm, the CPA, the CPA's firm, or a firm owner for the products or services.

((~~(8)~~)) (11) "Contingent fees" are fees established for the performance of any service pursuant to an arrangement in which no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service.

((~~(9)~~)) (12) "CPA" or "certified public accountant" means a person holding a CPA certificate ((~~under this act~~)) or a CPA license recognized in the state of Washington, including a person granted practice privileges pursuant to RCW 18.04.350(2).

((~~(10)~~)) (13) "CPE" means continuing professional education (see also "Interactive ((~~CPE~~)) self-study program").

((~~(11)~~)) (14) "Entering the state" means an individual is practicing public accounting in the state of Washington and that individual spends more than ten percent of his or her total work hours on activities conducted within the state of Washington, maintains an office or workstation in the state of Washington or advertises to provide his or her services within the state of Washington.

(15) "Enterprise" means any person or entity, whether organized for profit or not, with respect to which a CPA firm, a CPA, a CPA's firm, or a firm owner performs professional services.

((~~(12)~~)) (16) "Firm" means ((~~an entity licensed under the provisions of this chapter~~)) a sole proprietorship, a corporation, or a partnership. "Firm" also means a limited liability company formed under chapter 25.15 RCW.

((~~(13)~~)) (17) "Generally accepted accounting principles" (GAAP) is an accounting term that encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time. It includes not only broad guidelines of general application, but also detailed practices and procedures. Those conventions, rules, and procedures provide a standard by which to measure financial presentations.

((~~(14)~~)) (18) "Generally accepted auditing standards" (GAAS) are guidelines and procedures, promulgated by the AICPA, for conducting individual audits of historical financial statements.

((~~(15)~~)) (19) "Holding out" means any representation to the public by the use of restricted titles as set forth in ((~~the act~~)) RCW 18.04.345 by a person or firm that the person or firm ((~~is a certified public accountant~~)) holds a license or practice privileges under the Act and that the person or firm offers to perform any professional services to the public as a ((~~certified public accountant~~)) licensee. "Holding out" shall not affect ((~~or limit a person not required to hold a certificate under this chapter or~~)) a person or firm not required to hold a license under ((~~this chapter~~)) the Act from engaging in practices identified in ((~~the act~~)) RCW 18.04.350.

((~~(16)~~)) (20) "Inactive" means the certificate is in an inactive status because a person, who held a valid certificate on June 30, 2001, has not met the current requirements of licensure and has been granted inactive certificateholder status through the renewal process established by the board.

(21) "Interactive self-study program" means a CPE program designed to use learning methodologies that simulate a classroom learning process by employing software or administrative systems that provide significant ongoing interactive feedback to learners regarding their learning progress.

((~~(17)~~)) (22) "License" means a license to practice public accountancy issued to an individual under the Act or a license issued to a firm under the Act.

(23) "Licensee" means the holder of a ((~~valid~~)) license ((~~issued under the provisions of this~~)) to practice public accountancy issued under the Act.

((~~(18)~~)) (24) "Manager" means a manager of a limited liability company licensed as a firm under the Act.

(25) "NASBA" means the National Association of State Boards of Accountancy.

(26) "Natural person" means a living, human being.

(27) "Nonlicensee owner" means a CPA firm owner who is not licensed in any state to practice public accountancy.

(28) "Peer review" means a study, appraisal, or review of one or more aspects of the attest work of a licensee or licensed firm in the practice of public accountancy, by a person or persons who hold licenses and who are not affiliated with the person or firm being reviewed, including a peer review, or any internal review or inspection intended to comply with quality control policies and procedures, but not including the "quality assurance review" under RCW 18.04.025(14).

(29) "Practice privileges" means an individual:

Has a principal place of business outside of Washington state;

Is licensed to practice public accounting in another state;

Has notified the board of intent to enter the state;

Meets the statutory criteria for a grant of privileges;

Is subject to discipline in the state of Washington; and

Must comply with the Act and all board rules applicable to Washington state licensees to retain the privilege.

(30) "Principal place of business" means a single fixed location designated by the individual from which the individual directs, controls, and coordinates the majority of his or her business activities.

(31) "Public practice" or the "practice of public accounting" means performing or offering to perform by a person or firm holding itself out to the public as a licensee, for a client or potential client, one or more kinds of services involving the use of accounting or auditing skills, including the issuance of "audit reports," "review reports," or "compilation reports((,))" ((~~or "attestation reports"~~)) on financial statements, or one or more kinds of management advisory, or consulting services, or the preparation of tax returns, or the furnishing of advice on tax matters.

((~~(19)~~)) (32) "Quality assurance review or QAR" ((~~(QAR)~~)) is the process, established by and conducted at the direction of the board, of study, appraisal, or review of one or more aspects of the ((~~professional~~)) attest work of a licensee ((~~or firm, by a licensee(s) who is not affiliated with the licensee~~)) or licensed firm in the practice of public accountancy, by a person or persons who hold licenses and who are not affiliated with the person or firm being reviewed.

(((20) "Quality review" means a study, appraisal, or review of one or more aspects of the professional work of a licensee or firm, by a licensee(s) who is not affiliated with the licensee or firm being reviewed, including a peer review, or any internal review or inspection intended to comply with quality control policies and procedures but not including a "quality assurance review."

~~(21)~~)) (33) "Reciprocity" means board recognition of licenses, certificates or other professional accounting credentials that the board will rely upon in full or partial satisfaction of ((~~CPA certification or~~)) licensing requirements.

((~~(22)~~)) (34) "Referral fees" see definition of "commissions and referral fees" in subsection ((~~(7)~~)) (10) of this section.

((~~(23)~~)) (35) "Reports on financial statements" means any reports or opinions prepared by licensees, based on services performed in accordance with generally accepted auditing standards, standards for attestation engagements, or standards for accounting and review services, as to whether the presentation of information used for guidance in financial transactions or for accounting for or assessing the status or performance of commercial and noncommercial enterprises, whether public, private, or governmental, conforms with generally accepted accounting principles or other comprehensive bases of accounting. ((~~The term~~)) "Reports on financial statements" does not include ((~~incidental financial data included in management advisory services reports to support recommendations to a client~~)) services referenced in RCW 18.04.350(6) provided by persons not holding a license under the Act.

((~~(24)~~)) (36) "Representing oneself" for the purposes of RCW 18.04.295(2) and WAC 4-25-910(3), means having a license, practice privilege, certificate or registration that entitles the holder to use the title "CPA," "CPA-Inactive," or be a nonlicensee firm owner.

(37) "Rules of professional conduct" means ((~~principles and~~)) rules adopted by the board to govern the conduct of CPAs and CPA firms while representing themselves to others as CPAs. ((~~The~~)) These rules ((~~apply to~~)) also govern the conduct of nonlicensee firm owners and all persons using the ((~~CPA~~)) title CPA or CPA-Inactive.

((~~(25)~~)) (38) "State" includes the states and territories of the United States, including the District of Columbia, Puerto Rico, Guam, and the United States Virgin Islands.

(39) "Statements on auditing standards (SAS)" are interpretations of the generally accepted auditing standards and are issued by the Auditing Standards Board of the AICPA. Licensees are required to adhere to these standards in the performance of audits of financial statements.

(40) "Statements on standards for accounting and review services((")) (SSARS)" are standards, promulgated by the AICPA, to give guidance to licensees who are associated with the financial statements of nonpublic companies and issue compilation or review reports.

((~~(26)~~)) (41) "Statements on standards for attestation engagements (SSAE)" are guidelines, promulgated by the AICPA, for use by licensees in attesting to assertions involving matters other than historical financial statements and for which no other standards exist.

[Statutory Authority: RCW 18.04.055(11). 01-11-124, 4-25-410, filed 5/22/01, effective 6/30/01; 98-12-020, 4-25-410, filed 5/27/98, effective 6/27/98; 94-23-071, 4-25-410, filed 11/15/94, effective 12/16/94.]

OTS-4966.2

AMENDATORY SECTION(Amending WSR 01-11-125, filed 5/22/01, effective 6/30/01)

WAC 4-25-520 What public records does the board maintain? The board maintains the following public records:

(1) A data base of ((~~Washington CPAs~~)) licensees, certificateholders and individuals granted practice privileges;

(2) A data base of CPA examination candidates;

(3) A data base of ((~~CPA firms~~)) registered resident nonlicensee firm owners;

(4) Board orders;

(5) Board meeting minutes;

(6) Board policies;

(7) Board rules files; and

(8) Documents dealing with the regulatory, supervisory, and enforcement responsibilities of the board.

In order to obtain a list of individuals under the provisions of RCW 42.17.260(9), educational and professional organizations must use the form provided by the board and apply for and receive recognition by the board. Fees for lists must be paid in advance.

[Statutory Authority: RCW 18.04.055 and 42.17.260. 01-11-125, 4-25-520, filed 5/22/01, effective 6/30/01; 98-12-021, 4-25-520, filed 5/27/98, effective 6/27/98. Statutory Authority: Chapter 42.17 RCW. 93-14-050, 4-25-520, filed 6/29/93, effective 7/30/93.]

OTS-4967.2

AMENDATORY SECTION(Amending WSR 00-11-070, filed 5/15/00, effective 6/30/00)

WAC 4-25-540 What ((~~are brief adjudicative proceedings~~)) rules govern the proceedings before the board? Except where they are inconsistent with the rules in this chapter and subject to additional rules that the board may adopt from time to time, practice and procedure in and before the board are governed by the uniform procedural rules codified in the Washington Administrative Code, chapter 10-08 WAC.

For certain types of decisions, the board has adopted an appeal process authorized by ((~~chapter 34.05~~)) RCW 34.05.482 through 34.05.494 which is called a brief adjudicative proceeding. Decisions to which this appeal process will be applied are:

(()) (1) Denials of initial individual license ((~~or certificate~~)) applications, renewals, or applications for reinstatement;

(2) Denials of certificate renewals or applications for reinstatement;

(3) Denials of practice privilege;

(4) Denials of initial resident nonlicensee firm owner registration applications, renewals, or applications for reinstatement;

(()) (5) Denials of initial firm license applications and ((~~firm license~~)) renewals;

(()) (6) Denials of exam applications; and

(()) (7) A determination whether a licensee or certificateholder has been certified by a lending agency and reported for nonpayment or default on a federally or state-guaranteed student loan or service conditional scholarship. To appeal a decision you must submit your request for a brief adjudicative proceeding, in writing, to the board within thirty days after the decision by board staff is posted in the U.S. mail. The ((~~residing~~)) presiding officer for the brief adjudicative proceedings is the executive director. After consulting with a board member, the executive director renders a decision either upholding or overturning the decision by board staff. This decision, called an order, is mailed to you.

If you are dissatisfied with the order in the brief adjudicative proceeding, you may appeal to the board's vice-chair. This appeal process is called an administrative review. Your appeal must be received by the board, orally or in writing, within twenty-one days after the brief adjudicative proceedings order is posted in the U.S. mail. The vice-chair considers your appeal and either upholds or overturns the brief adjudicative proceeding order. The vice-chair's decision, also called an order, is mailed to you.

[Statutory Authority: RCW 18.04.055(1) and 34.05.482. 00-11-070, 4-25-540, filed 5/15/00, effective 6/30/00; 98-12-022, 4-25-540, filed 5/27/98, effective 6/27/98. Statutory Authority: RCW 18.04.055. 93-12-074, 4-25-540, filed 5/27/93, effective 7/1/93.]

OTS-4970.3

AMENDATORY SECTION(Amending WSR 93-22-046, filed 10/28/93, effective 11/28/93)

WAC 4-25-610 ((~~Principles of conduct.~~)) Which rules govern the conduct of CPAs? The ((~~principles of conduct~~)) rules that govern the conduct of CPAs are as follows:

Professional ((~~demeanor~~)) judgment - In carrying out their responsibilities, ((~~professional~~)) a person((s)) representing oneself as a CPA or using the CPA title ((~~shall~~)), CPA firms, and firm owners must exercise professional judgment in all their activities.

The public interest - ((~~Persons~~)) A person representing oneself as a CPA or using the CPA title ((~~shall~~)), CPA firms, and firm owners must accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.

Integrity - To maintain and broaden public confidence ((~~persons~~)) a person representing oneself as a CPA or using the CPA title ((~~shall~~)), CPA firms, and firm owners must perform all professional responsibilities with the highest sense of honesty.

Objectivity - Objectivity is to be maintained by ((~~persons~~)) a person representing oneself as a CPA or using the CPA title, CPA firms, and firm owners. Specifically, ((~~persons~~)) a person representing oneself as a CPA or using the CPA title ((~~shall~~)), CPA firms, and firm owners must:

(1) Avoid rendering professional services where actual or perceived conflicts of interest exist;

(2) Be independent in fact and appearance when providing ((~~auditing or other~~)) attestation services.

Due care - ((~~Persons~~)) A person representing oneself as a CPA or using the CPA title ((~~shall~~)), CPA firms, and firm owners must comply with federal and state laws and the profession's technical and ethical standards, maintain competence and strive to improve the quality of services, and discharge professional responsibility to the best of the ((~~CPA's~~)) person's or the firm's ability.

[Statutory Authority: RCW 18.40.055. 93-22-046, 4-25-610, filed 10/28/93, effective 11/28/93.]

OTS-4971.3

AMENDATORY SECTION(Amending WSR 98-12-048, filed 5/29/98, effective 6/29/98)

WAC 4-25-620 ((~~When must I comply with the rules of conduct requiring~~)) What are the requirements concerning integrity and objectivity? ((~~If you use the title CPA~~)) When offering or performing ((~~professional~~)) services ((~~you~~)), CPAs, CPA firms, and firm owners must:

Remain honest and objective((~~. You must~~));

Not misrepresent facts ((or));

Not subordinate ((~~your~~)) their judgment to others((.

~~Also, you must~~)); and

Remain free of conflicts of interest unless such conflicts are specifically permitted by board rule or professional standards listed in WAC 4-25-631.

If the language of the professional standards listed in WAC 4-25-631 differ from or conflict with specific board rules, board rules prevail((s)).

[Statutory Authority: RCW 18.04.055(2). 98-12-048, 4-25-620, filed 5/29/98, effective 6/29/98. Statutory Authority: RCW 18.40.055. 93-22-046, 4-25-620, filed 10/28/93, effective 11/28/93.]

OTS-4973.3

AMENDATORY SECTION(Amending WSR 01-03-012, filed 1/5/01, effective 2/5/01)

WAC 4-25-626 What restrictions govern commissions, referral, and contingent fees? For the purposes of this section, the term "licensed firm" includes any affiliated entities and the term "firm owner" includes the owners of any affiliated entities.

(1) A CPA ((~~shall~~)), a firm owner, or a licensed firm must not for a commission recommend or refer to a client any product or service, or for a commission recommend or refer any product or service to be supplied by a client, or receive a commission, when the CPA ((~~also~~)), the CPA's firm, the owner's firm, or the firm performs attest services for that client. This prohibition applies during the period in which the CPA, the CPA's firm, the owner's firm, or the firm is engaged to perform the attest services and the period covered by any historical financial statements involved in the attest services.

(2) A CPA, a licensed firm, or a firm owner who is not prohibited by this section from performing services for or receiving a commission and who is paid or expects to be paid a commission ((~~shall~~)) must disclose, consistent with the requirements set forth in subsection (7) of this section, that fact to any person or entity to whom the CPA, the CPA's firm, the firm owner, the owner's firm, or the licensed firm recommends or refers a product or service to which the commission relates.

(3) ((~~Any~~)) A CPA ((~~who accepts~~)), a firm owner, or a licensed firm accepting a referral fee for recommending or referring any services ((~~of a CPA~~)) to any person or entity or who pays a referral fee to obtain a client ((~~shall~~)) must disclose, consistent with the requirements set forth in subsection (7) of this section, such acceptance or payment to the client.

(4) A CPA ((~~shall~~)), a firm owner, or a licensed firm must not:

(a) Perform for a contingent fee any professional services for, or receive such a fee from a client for whom the CPA ((or)), the CPA's firm, the firm owner, the owner's firm, or the licensed firm performs attest services; or

(b) Prepare an original or amended tax return or claim for a tax refund for a contingent fee for any client.

(5) The prohibition in subsection (4)(a) of this section applies during the period in which the CPA, the CPA's firm, the owner's firm, or the licensed firm is engaged to perform the attest services and the period covered by any historical financial statements involved in the attest services.

(6) ((Except as stated in the next sentence, a contingent fee is a fee established for the performance of any service pursuant to an arrangement in which no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service. Solely for purposes of this section,)) Fees are not ((~~regarded as being~~)) considered contingent if fixed by courts or other public authorities, or, in tax matters, if determined based on the results of judicial proceedings or the findings of governmental agencies. ((~~A CPA's~~)) Fees may vary depending, for example, on the complexity of services rendered.

(7) All CPAs, firm owners, and licensed firms who accept commission, referral and contingent fee arrangements must:

(a) Disclose the arrangement in writing and in advance of client acceptance;

(b) Disclose the method of calculating the fee or amount of fee; ((~~and~~))

(d) Obtain the client's consent to the fee arrangement in writing.

(8) Nothing in this rule shall be interpreted to preclude a CPA, firm owner, or licensed firm from purchasing, selling, or merging all or a portion of a CPA practice or to require disclosure to clients of terms or payments made or received pursuant to the purchase, sale, or merger.

[Statutory Authority: RCW 18.04.055(2). 01-03-012, 4-25-626, filed 1/5/01, effective 2/5/01; 98-12-055, 4-25-626, filed 5/29/98, effective 6/29/98.]

OTS-4974.3

AMENDATORY SECTION(Amending WSR 93-22-046, filed 10/28/93, effective 11/28/93)

WAC 4-25-630 ((~~Competence.~~)) What are the requirements concerning competence? ((~~A certified public accountant shall~~)) CPAs, CPA firms, and firm owners must not undertake to perform any ((~~endeavor for the performance of~~)) service((s)) as a ((~~certified public accountant that he or she cannot~~)) CPA, CPA firm, or as a firm owner unless they can reasonably expect to complete the service with professional competence.

[Statutory Authority: RCW 18.40.055. 93-22-046, 4-25-630, filed 10/28/93, effective 11/28/93.]

OTS-4975.3

AMENDATORY SECTION(Amending WSR 00-11-071, filed 5/15/00, effective 6/30/00)

WAC 4-25-631 With which rules, regulations and professional standards must a CPA, CPA firm, and firm owner comply? ((~~A CPA~~)) CPAs, CPA firms, and firm owners must comply with rules, regulations, and professional standards ((~~(standards)~~)) promulgated by the appropriate bodies for each ((~~endeavor~~)) service undertaken. However, if the requirements found in the professional standards listed in this section differs from the requirements found in specific board rules, board rules prevail.

Such appropriate bodies include, but are not limited to, the Securities and Exchange Commission (SEC); the Financial Accounting Standards Board (FASB); the Governmental Accounting Standards Board (GASB); the Cost Accounting Standards Board (CASB); the Federal Accounting Standards Advisory Board (FASAB); the U.S. General Accounting Office (GAO); the Federal Office of Management and Budget (OMB); the Internal Revenue Service (IRS); the American Institute of Certified Public Accountants (AICPA), and federal, state, and local audit, regulatory and tax agencies.

Such standards include:

(1) Statements on Auditing Standards and related Auditing Interpretations issued by the AICPA ((~~including subsequent amendments~~));

(2) Statements on Standards for Accounting and Review Services and related Accounting and Review Services Interpretations issued by the AICPA ((~~including subsequent amendments~~));

(3) Statements on Governmental Accounting and Financial Reporting Services issued by GASB ((~~including subsequent amendments~~));

(4) Statements on Standards for Attestation Engagements and related Attestation Engagements Interpretations issued by AICPA ((~~including subsequent amendments~~));

(5) Statements of Financial Accounting Standards, together with those Accounting Research Bulletins and Accounting Principles Board Opinions which are not superseded by action of the FASB((~~, including subsequent amendments~~));

(6) Statement on Standards for Consulting Services issued by the AICPA ((~~including subsequent amendments~~));

(7) Statements on Quality Control Standards issued by the AICPA ((~~including subsequent amendments~~));

(8) Statements on ((~~Responsibilities in Tax Practice~~)) Standards for Tax Services and Interpretation of Statements on ((~~Responsibilities in Tax Practice~~)) Standards for Tax Services issued by the AICPA ((~~including subsequent amendments~~));

(9) Statements on Responsibilities in Personal Financial Planning Practice issued by the AICPA ((~~including subsequent amendments~~));

(10) Professional Code of Conduct issued by the AICPA including interpretations((,)) and ethics rulings((~~, and subsequent amendments~~));

(11) Governmental Auditing Standards issued by the U.S. General Accounting Office((~~, and subsequent amendments~~)); ((~~and~~))

(12) ((~~Auditing and Accounting Guides (both General and Industry) issued by the~~)) AICPA Industry Audit and Accounting Guides; and

(13) SEC Rules, Concept Releases, Interpretative Releases, and Policy Statements.

If the professional services are governed by standards not included in subsections (1) through ((~~(12)~~)) (13) of this section, ((~~the CPA~~)) you must:

Justify the departure from the standards listed in subsections (1) through ((~~(12)~~)) (13) of this section;

Determine what standards are applicable; and

Comply with the applicable standards.

Copies of the above standards may be inspected at the board's office.

[Statutory Author

WAC 4-25-410	Definitions.
WAC 4-25-520	What public records does the board maintain?
WAC 4-25-540	What are brief adjudicative proceedings?
WAC 4-25-610	Principles of conduct.
WAC 4-25-620	When must I comply with the rules of conduct requiring integrity and objectivity?
WAC 4-25-626	What restrictions govern commissions, referral, and contingent fees?
WAC 4-25-630	Competence.
WAC 4-25-631	With which rules, regulations and professional standards must a CPA comply?
WAC 4-25-640	Clients' confidential information.
WAC 4-25-660	What are the limitations on advertising and other forms of solicitation?
WAC 4-25-710	CPA certificate -- Education requirements.
WAC 4-25-720	CPA examination--Application.
WAC 4-25-721	What does the board consider to be cheating on the CPA examination, what actions may the board take if cheating is suspected, and what sanctions may the board impose if cheating occurs?
WAC 4-25-730	What are the experience requirements in order to obtain a CPA license?
WAC 4-25-735 New	What rules must a certificateholder comply with and how does a certificateholder apply for licensure?
WAC 4-25-745	How do I apply for an initial CPA license and/or certificate?
WAC 4-25-746	How do I apply for a Washington state CPA license and/or certificate if I hold a valid CPA certificate, license or permit in another state?
WAC 4-25-750	What are the CPA firm licensing requirements?
WAC 4-25-752 New	How do I register as a resident nonlicensee owner of a licensed firm and with which rules must a nonlicensee firm owner comply?
WAC 4-25-756 New	I am licensed in another state -- How do I notify the board of my intent to enter the state in order to obtain practice privileges in the state of Washington?
WAC 4-25-783	How do I renew a Washington CPA certificate and/or license granted through foreign reciprocity?
WAC 4-25-790	How do I renew my CPA license and/or certificate?
WAC 4-25-791	If I hold a certificate under the reasonable cause exemption to the CPE requirements, how do I apply to return to my previous status as a licensee or a certificateholder?
WAC 4-25-792	How do I apply for reinstatement of a lapsed CPA license and/or certificate?
WAC 4-25-793 New	If I am a retiree, how do I apply to return to my previous status as a licensee or a certificateholder?
WAC 4-25-795	How do I apply for reinstatement of a revoked or suspended license and/or certificate?
WAC 4-25-820	Quality assurance review.
WAC 4-25-830	What are the CPE requirements?
WAC 4-25-910	What are the bases for the board to impose discipline?

	Statutory authority for adoption:	Statute being implemented:
WAC 4-25-410	RCW 18.04.055	RCW 18.04.055(16)
WAC 4-25-520	RCW 18.04.055 and 42.17.260	RCW 42.17.260
WAC 4-25-540	RCW 18.04.055(1), 34.05.220, and 34.05.482	RCW 18.04.055(1) and 34.05.482
WAC 4-25-610, 4-25-620, 4-25-626, 4-25-630, 4-25-631, 4-25-640, and 4-25-660	RCW 18.04.055(2)	RCW 18.04.055(2)
WAC 4-25-710	RCW 18.04.055(5) and 18.04.105(1)	RCW 18.04.055(5) and 18.04.105(1)
WAC 4-25-720	RCW 18.04.055(5) and 18.04.105(2)	RCW 18.04.055(5) and 18.04.105(2)
WAC 4-25-721	RCW 18.04.055	RCW 18.04.055
WAC 4-25-730	RCW 18.04.055(11) and 18.04.105 (1)(d)	RCW 18.04.055(11) and 18.04.105 (1)(d)
WAC 4-25-735	RCW 18.04.055(12) and 18.04.105(4)	RCW 18.04.055(12) and 18.04.105(4)
WAC 4-25-745	RCW 18.04.055, 18.04.105(1), and 18.04.215(1)	RCW 18.04.055, 18.04.105(1), and 18.04.215(1)
WAC 4-25-746	RCW 18.04.180 and 18.04.215(6)	RCW 18.04.180 and 18.04.215(6)
WAC 4-25-750	RCW 18.04.055(8), 18.04.195, and 18.04.205	RCW 18.04.055(8), 18.04.195, and 18.04.205
WAC 4-25-752	RCW 18.04.055(13) and 18.04.195(8)	RCW 18.04.055(13) and 18.04.195(8)
WAC 4-25-756	RCW 18.04.350(2)	RCW 18.04.350(2)
WAC 4-25-783	RCW 18.04.183 and 18.04.215(2)	RCW 18.04.183 and 18.04.215(2)
WAC 4-25-790, 4-25-791, and 4-25-792	RCW 18.04.215 (2) and (4)	RCW 18.04.215 (2) and (4)
WAC 4-25-793	RCW 18.04.215(7)	RCW 18.04.215(7)
WAC 4-25-795	RCW 18.04.215(2), 18.04.335, and 34.05.220	RCW 18.04.215(2), 18.04.335, and 34.05.220
WAC 4-25-820	RCW 18.04.055(9)	RCW 18.04.055(9)
WAC 4-25-830	RCW 18.04.055(7), 18.04.215(5)	RCW 18.04.055(7), 18.04.215(5)
WAC 4-25-910	RCW 18.04.055(11), 18.04.295, and 18.04.305	RCW 18.04.055(11), 18.04.295, and 18.04.305

	Promote clarity.
	Ensure effective communication.
	Ensure fairness in interpretation and application of the rules.
	Promote efficiencies through minimizing gray areas.

WAC 4-25-410	Defines terms used throughout the board's rules to provide clarity for users.
WAC 4-25-520	Notifies the public of the records available for inspection and copying for informational purposes.
WAC 4-25-540	Chapter 34.05 RCW, Administrative Procedure Act, allows agencies to adopt brief adjudicative proceedings to resolve some limited administrative issues. The board uses brief adjudicative proceedings to provide a clear process to persons to appeal staff actions denying applications.
WAC 4-25-610, 4-25-620, 4-25-630, 4-25-631	Advises Washington CPAs of the standards of conduct and when they must comply with these standards. These standards are needed to establish and maintain high standards of competence and ethics to address the need to protect the public.
WAC 4-25-626	In order to protect the public interest, this rule prohibits licensees from being compensated in a manner which tends to bias or give the appearance of tending to bias the results of their attest services. However, to permit Washington CPAs to practice public accounting on a level playing field with other CPAs nationwide, this rule is aligned with the Uniform Accountancy Act (UAA), to follow the national trend of allowing compensation in the form of commissions, referral fees, and contingent fees, and to address the profession's desire to allow commissions and contingent fees with disclosure. In order to ensure the public is sufficiently informed the rule requires all CPAs accepting commissions, referral fees, and contingent fees to disclose in writing and in advance of client acceptance the method of calculating the fee and the CPA's role as the client's advisor.
WAC 4-25-640	Incorporates parts of statute (RCW 18.04.390 and [18.04.]405) into the board's rules of professional conduct. The rule prohibits Washington CPAs from disclosing any confidential client information without the consent of the client; clarifies when the rule does not affect a CPA's disclosure of client information, and outlines a CPA's obligations with respect to the records of a client in a clear format. This standard of professional conduct is needed to protect the public by ensuring privacy and record accessibility.
WAC 4-25-660	"Advertising and other forms of solicitation" is a rule of professional conduct necessary to establish and maintain high standards of competence and ethics of certified public accountants (CPAs) to protect the public interest especially in the area of advertising and solicitation.
WAC 4-25-710	Outlines the educational requirements for individuals to qualify to apply for the CPA examination and ultimately the CPA license, including requirements regarding education obtained outside of the United States, accreditation standards, and an alternative to accreditation. Candidates for the CPA exam need clear concise requirements to ensure fair treatment of all candidates. Ensures candidates will have the necessary foundation and obtain acceptable competence in an increasingly complex business environment to eventually become a licensed CPA. This rule continues to be aligned with the Uniform Accountancy Act (UAA) therefore assuring that Washington CPAs are substantially equivalent with CPAs in other states.
WAC 4-25-720	Outlines the requirements for individuals making application for the CPA exam such as how to file an application, the application due date, timing for completion and documentation of the education requirements, when exam admission notices will be mailed, the passing grade, conditional credit, proctoring, and the completion of an ethics exam.
WAC 4-25-721	This rule provides CPA exam candidates with a listing of what the board considers to be cheating, what actions the board may take if cheating is suspected, and what sanctions the board may impose if cheating occurs.
WAC 4-25-730	Licensed CPAs are statutorily given the exclusive right to perform audit, review, and compilation services. In exchange for this valuable right, CPAs are expected to have a certain level of mature expertise prior to offering unsupervised services to the general public. Washington state statute mandates that CPAs demonstrate one year of public accounting experience and meeting competency requirements. The profession and the public expect CPAs to have a focused, relevant and meaningful apprenticeship period to perfect skills and abilities.
WAC 4-25-735	Establishes the requirements for certificateholders to qualify and apply for a license.
WAC 4-25-745	Sets forth the procedures applicants for an initial license must follow in a short clear manner; notifies the applicant of the board's definition of a "complete" application and where the board will send notification when the application is complete; sets the expiration of the license on June 30 of the third calendar year following initial licensure; notifies applicants of the prohibition against using the CPA title by persons not properly licensed.
WAC 4-25-746	Sets the procedures applicants for a Washington CPA license by reciprocity must follow in a short clear manner; notifies the applicant of the board's definition of a "complete" application and where the board will send notification when the application is complete; sets the expiration of the license certificate on June 30 of the third calendar year following licensure in Washington state; restates RCW 18.04.215(6) that allows CPAs licensed in another state to practice in Washington state from the date of filing a "complete" application with the board.
WAC 4-25-750	RCW 18.04.205(3) directs the board to prescribe the procedures to be followed to register and maintain offices established for the practice of public accounting in Washington state. RCW 18.04.195 requires CPA firms to obtain, and renew, licenses to practice public accounting.
WAC 4-25-752 New	Establishes the requirements for resident nonlicensee owner applying to be a registered nonlicensee owner and defines with which rules the nonlicensee owner must comply.
WAC 4-25-756 New	Establishes the requirements for individuals, whose principal place of business is not in Washington, to submit notification for the privilege to practice in Washington state.
WAC 4-25-783	Sets the procedures for the renewal of a CPA license granted based in part on a foreign accounting credential in a short clear manner eliminating confusion; notifies the applicant that the board will send a renewal application in January to the last address the CPA provided to the board; notifies the applicant of the board's definition of a "complete" renewal application form and the due date for filing; sets the expiration of the certificate/license to June 30 of the third calendar year following the renewal; notifies the applicant that failure to file a complete application by the due date will result in late fees; notifies the applicant that failure to file a complete application prior to the expiration of their certificate/license will result in the lapse of their certificate/license and loss of the right to use the CPA title or be an owner of a CPA firm.
WAC 4-25-790	Sets the procedures for the renewal of a certificate/license/resident nonlicensee firm owner registration in a short clear manner eliminating confusion; notifies the applicant that the board will send a renewal application in January to the last address the CPA provided to the board; notifies the applicant of the board's definition of a "complete" application and the due date for filing; sets the expiration of the certificate/license/resident nonlicensee firm owner registration to June 30 of the third calendar year following the renewal; notifies the applicant that failure to file a complete application by the due date will result in late fees; notifies the applicant that failure to file a complete application prior to the expiration of their certificate/license/resident nonlicensee firm owner registration will result in the lapse of their certificate/license and loss of the right to use the CPA title or be an owner of a CPA firm.
WAC 4-25-791	Sets the procedures certificateholders who held a license prior to July 1, 2001, must follow to return to a previous status as a licensee.
WAC 4-25-792	In a short, clear manner that eliminates confusion, this rule sets the procedures CPAs must follow to reinstate their lapsed license, certificate, or registration as a resident nonlicensee firm owner.
WAC 4-25-793 New	Establishes the process for a retiree to "reactivate" their certificate or license.
WAC 4-25-795	Sets the procedures persons or firms whose certificate/license/resident nonlicensee firm owner registration has been revoked or suspended must follow in order to request modification of a suspension or revocation order or to apply for reinstatement.
WAC 4-25-820	In order to protect the public from financial information that does not meet set standards, this rule establishes the process of monitoring the attest work of licensees (including CPA firms). CPA firms offering attest (audit, review, or compilation) services must comply with set standards. Every three years the CPA firm must either submit reports to financial statements for board review or demonstrate participation in a board approved peer review program. Set the actions the board may take if it is determined that a report is substandard or seriously questionable with respect to applicable professional standards.
WAC 4-25-830	RCW 18.04.215(5) authorizes the board to set the rules for continuing professional education to maintain or improve the professional competency of licensees, certificateholders, and resident nonlicensee firm owners as a condition to maintaining their certificate/license/resident nonlicensee firm owner registration; accomplishes a heightened awareness of the board's rules, especially as they pertain to ethics, through required continuing professional education.
WAC 4-25-910	RCW 18.04.295 and 18.04.305 authorize the board to impose discipline against Washington CPAs, CPA firms, individuals granted practice privileges, or resident nonlicensee firm owners. Using the clear rule-writing technique that eliminates confusion, this rule lists specific examples of prohibited acts that constitute grounds for discipline.

WAC 4-25-410	Adds the definition of "active individual participant."
	Adds the definition of "affiliated entity." Having the definition align with (anticipated) national standards will support an understanding of, and compliance with, the board's rule.
	Removes ambiguous language from the definition of "attest" services.
	Adds individuals granted practice privileges to the listing of individuals permitted to perform attest services.
	Aligns the definition of "certificate" to the new statute.
	Adds the definition of "certificateholder" from the new statute.
	Adds relationships with firm owners, affiliated entities, and owners of affiliated entities to circumstances creating a "client."
	Adds the CPA's firm, CPA firms and firm owners to the criteria defining a "commission."
	Includes persons with practice privileges in the definition of "CPA" and reworded the definition to clarify that under the new act licensees no longer hold a certificate (they hold just a license).
	Adds persons with practice privileges to the definition of "CPA."
	Adds the definition for "entering the state."
	Adds the notion that CPA firms and firm owners (in addition to CPAs) perform professional services for "enterprises."
	Aligns the definition of "firm" with the act.
	Establishes the meaning of "firm owner" because that term is used in the rules.
	Adds persons with practice privileges to the definition of whom may practice public accounting under the definition of "holding out."
	Adds the definition of "inactive" from the new statute.
	Adds the definition of "license" (note the definition refers to both an individual and a firm license).
	Aligns the definition of "licensee" with the act.
	Adds the definition of "manager" because the term is used in the rules.
	Adds the abbreviation for National Association of State Boards of Accountancy.
	Adds the definition of "natural person" because the term is used in the rules (referring to nonlicensee firm owners).
	Adds the definition of "nonlicensee owner" because the term is used in the rules.
	Moves the definition of "quality review" to "peer review" to reflect verbiage changes resulting from the new statute.
	Adds the definition of "practice privileges because the term is used throughout the rules.
	Adds the definition of "principal place of business" because the term is used in the rules.
	Aligns the definition of "reports on financial statements" with statute.
	Adds the definition of "representing oneself" because the term is used in the rules.
	Adds the definition of "state" because the term is used in the rules.
	Adds the definition of "statements on auditing standards (SAS)."
WAC 4-25-520	Due to provisions in the new act, the board will maintain public records on individuals with practice privileges and registered resident nonlicensee firm owners.
WAC 4-25-540	Adds the provision that the board's procedures are governed by the uniform procedural rules codified in chapter 10-08 WAC. (Based on the Prosecuting Attorney General's recommendation.) Adds the new types of applications (resulting from the new act) that will come under the BAP provisions. Separates the language for certificate renewals, and reinstatements from the language for license applications, renewals, and reinstatements. (Under the old law licensees held both a certificate and a license; under the new law licensees will only hold a license.)
WAC 4-25-610	Requires firm owners to comply with the principles of conduct. Note: Licensees, certificateholders and individuals granted practice privileges are included in the definition of CPA.
	Clarifies that CPA firms must comply with the principles.
	To clarify the current requirements, changes the words "shall" to "must."
WAC 4-25-620	Requires firm owners to comply with requirements concerning integrity and objectivity. Note: Licensees, certificate-holders and individuals granted practice privileges are included in the definition of CPA.
	Clarifies that CPA firms must comply with the rule.
	To clarify the current requirements, changes the words "shall" to "must."
	Clarifies that if the language of professional standards listed in board rule differ or conflict with specific board rules, board rules prevail.
WAC 4-25-626	Adds firm owners, affiliated entities, and owners of affiliated entities to the example of relationships that result in a prohibition against accepting a commission/referral/contingent fee.
	Removes the definition of contingent fee because it was added to WAC 4-25-410 Definitions.
	To clarify the current requirements, changes the words "shall" to "must."
	Adds the requirement to obtain the client's consent to the fee arrangement in writing.
	Adds that nothing in the rule precludes the purchase, sale, or merger of a CPA practice or requires disclosure to clients of terms or payments made or received pursuant to the purchase, sale, or merger.
WAC 4-25-630	Adds firm owners to the requirement to be competent.
	Clarifies that CPA firms must meet the competency requirement.
	To clarify the current requirements, changes the words "shall" to "must."
WAC 4-25-631	Adds firm owners to the requirement to comply with standards.
	Clarifies that CPA firms must comply with standards.
	Note: The term "CPA" includes licensees, certificateholders, and individuals granted practice privileges.
	Removes the language "including subsequent amendments" language which makes the rule too vague and could make the rule difficult to enforce.
	Clarifies the current requirement that CPA firms and CPAs must comply with rules and regulations promulgated by the SEC.
	Clarifies that if the language of professional standards listed in board rule differ or conflict with specific board rules, board rules prevail.
	Replaces the vague language: "Auditing and accounting guides (both general and industry) issued by the AICPA" with the specific language "AICPA Industry Audit and Accounting Guides."
WAC 4-25-640	Moves the definition of client to the first paragraph and made it applicable to the entire rule.
	Adds firm owners to those required to comply with the rule.
	Changes all references to "CPA" to "licensee" making this rule applicable to licensed CPAs, CPA firms and individuals with practice privileges. Excludes certificateholders from the provisions of this rule by using the term "licensee."
	To clarify the current requirements, changes the words "shall" to "must."
	Clarifies that this rue does not preclude a review of client information in conjunction with a prospective purchase, sale, or merger of all or part of a CPA's practice.
	Clarifies that client records include electronic documents.
WAC 4-25-660	Adds firm owners to those that must comply with the rule.
	Corrects language by tying the notification requirement to a "web site" rather than "Internet site."
	Clarifies that licensees (including CPA firms) must place notification of holding a Washington state license on their web site or provide a name and contact information for an individual in the organization who will respond to inquiries regarding individual license information within seven business days.
	Adds the requirement that certificateholders using the CPA title must state on their web site that they do not hold a license to practice public accounting and they cannot offer accounting, attest, tax services, etc. in association with the use of title CPA, or CPA-inactive.
	Adds the requirement that firm owners must disclose on their web site that they are either licensed or registered (nonlicensee owners) with the board.
	To clarify the current requirements, changes the words "shall" to "must."
WAC 4-25-710	Eliminates the pre-July 1, 2000, education requirement.
	Moves the definition of "accounting concentration" to the "education requirements" sections.
	Adds the "completion of education requirement" section from WAC 4-25-720 to this rule.
	Clarifies the current requirement for candidates to complete a form in order to utilize the 120 day provision.
WAC 4-25-720	Eliminates the statement that the board will refund a portion of examination fees because refunds are made by the contractor.
	Incorporates the exam conditioning requirements into the rule. (The conditioning requirements were eliminated from statute. Note, this revision does not change the conditioning requirements it simply places the existing requirements into the rule).
	Clarifies the current ethics examination requirements.
	Removes the "completion of education requirement" section from this rule and adds it to WAC 4-25-710.
WAC 4-25-721	Adds that cheating on the CPA exam demonstrates a lack of good character. This ties directly to the requirements for licensure in the statute.
	Removes vague language that all candidates involved in cheating may be subject to penalties, although not necessarily of the same severity.
	Removes fines and cost recovery from the list of sanctions the board may impose on exam candidates.
WAC 4-25-730	Promotes fairness in the application of a rule by requiring the same competency attainment by applicants no matter where the experience is obtained - whether in a CPA firm, government, private industry, or academia.
	Adds verbiage from the statute regarding the specific types of skills that must be used in order to meet the experience requirement.
	Removes references to continuing professional education requirements - these requirements are addressed in other board rules.
	Adds the provision in the new statute allowing individuals holding a certificate at June 30, 2001, and applying for licensure before June 30, 2004, to use any prior experience.
WAC 4-25-735	New section.
WAC 4-25-745	Consistent with changes in statute, eliminates the ability to apply for a certificate.
	Adds a continuing professional education requirement for those individuals who passed the CP examination more than four years prior to applying for an initial CPA license.
	Lists in the rule the requirements for licensure.
	Adjusts the definition of what services must be performed in a CPA firm to align with the new statute.
	Eliminates the requirement to have a notarized signature.
WAC 4-25-746	Adds the requirement (from statute) that the other state of licensure must grant reciprocity provisions to Washington's CPAs.
	Clarifies the requirements for licensure as stated in statute including notice that the board may accept the National Association of State Boards of Accountancy's designation of the applicant as substantially equivalent to national standards as meeting the requirements for licensure.
	Adds the notation that a CPA may practice as soon as the license application is filed with the board.
	Adds the notation (from statute) that individuals obtaining a Washington license via interstate reciprocity must notify the board within thirty days if the license issued by the other jurisdictions has lapsed or become invalid.
	Eliminates the requirement to have a notarized signature.
WAC 4-25-750	Adds the provision (from statute) allowing for nonlicensee owners.
	Adds the requirement (from statute) that the principal partner of a partnership, principal officer of a corporation, or the principal manager of a limited liability company or any partner, officer, or member having authority over issuing reports on financial statements must be a licensee.
	Adds the requirements (from statute) for a nonlicensee owner to be a natural person, meet good character requirements, comply with board rules, and be an active participant in the firm or affiliated entity.
	Adds the requirement (from statute) for a resident nonlicensee owner to register with the board.
	Clarifies what is considered an amendment.
WAC 4-25-752	New section.
WAC 4-25-756	New section.
WAC 4-25-783	Identifies that a renewal form will be mailed to the CPA.
	Clarifies that in order to renew the individual must certify that s/he compiled with the board's CPE requirements.
	Adds the requirement (from statute) that beginning with the first day of the first renewal period beginning after July 1, 2001, certificateholders must print or display the word "Inactive" immediately following the CPA title whenever the CPA title is printed.
WAC 4-25-790	Adds renewing resident nonlicensee owner registrations to the "how do I renew" rule.
	Clarifies that a licensee may not renew as a certificateholder.
	Clarifies that in order to renew the individual must certify that they met the board's CPE requirements.
WAC 4-25-791	Tailors this rule so that it applies to certificateholders who want to return to their previous status as a licensee.
	Adds the requirement that certificateholders cannot practice public accounting in association with the use of the title CPA until the individual returns to his/her previous status as a licensee.
WAC 4-25-792	Extends the reinstatement rule to include resident nonlicensee owner registrations.
	Clarifies that individuals with a lapsed individual license may not reinstate as certificateholders.
WAC 4-25-793	New section.
WAC 4-25-795	Extends the reinstatement of a revoked or suspended license or certificate to resident nonlicensee owner registrations.
WAC 4-25-820	Adds that a firm required to submit to peer review may be assessed the cost of the peer review.
	Adds that firms requesting exemption from QAR must submit to the board letter of comments, response to letter of comments, if applicable, and letter of acceptance in addition to the copy of an unmodified report.
WAC 4-25-830	Changes the CPE requirement for certificateholders to a four hour course in ethics applicable to the practice of public accounting in the state of Washington every three years.
	Adds the CPE requirement for resident nonlicensee firm owners to obtain a four hour course in ethics every three years.
	Adds that individuals holding practice privileges are exempt from the CPE requirements.
	Adds prorated CPE requirements for individuals converting their status from certificateholder to a licensee when the license is issued less than three years before the end of a certificate renewal cycle.
	Changes the title "reasonable cause exemption" to "renewal following retirement" consistent with changes in statute.
	Consistent with the new statute, requires certificateholders applying for a license to obtain one hundred twenty hours of CPE including a four hour course in ethics and limited to twenty-four hours in nontechnical subjects; includes a prorated schedule for certificateholders whose certificate was issued less than three years prior to the date of application for a license.
	Adds resident nonlicensee firm owners to the provisions allowing for a CPE extension request.
WAC 4-25-910	Adds the new provisions (from the new statute) pertaining to individuals granted practice privileges, nonlicensee firm owners, full restitution, and fines (up to $10,000).
	Adds failure to comply with an order of the board as a prohibited act.